Where a claimant has a New York or New Jersey or Longshore workers’ compensation claim and is entitled to benefits under the James Zadroga 9/11 Health and Compensation Act of 2010 (“Zadroga Act”) you can obtain a Section 32 (NY WCL § 32), Section 20 (N.J.S.A. 34:15-20) or 8(i) LHWCA (33 U.S.C. 908[i]) lump-sum dismissals of state or Federal workers’ compensation benefits if the secondary payer rights of the WTC Health program are considered.

The Zadroga Act and the World Trade Center Health Program.

The James Zadroga 9/11 Health and Compensation Act of 2010 (“Zadroga Act”) establishes the World Trade Center Health Program (“WTC Health Program”) administered by the Department of Health and Human Services. The Act also extends the September 11th Victim Compensation Fund (VCF), initially operated from 2001 to 2004. The WTC Health Program provides medical monitoring and treatment for emergency responders, recovery, and cleanup workers, and volunteers who helped after the terrorist attacks on September 11, 2001 and for people who were present in the dust or dust cloud on 9/11 or who worked, resided, or attended school, childcare, or adult daycare in the New York City disaster area for a period of time on 9/11 or during the following months.Continue reading Settling Cases Involving the World Trade Center Health Program→

In a recently-decided case the Benefits Review Board considered the “dollar for dollar” credit due to an employer/carrier for prior injury. This case is interesting because the claimant’s examining physician actually found less disability in the claimant’s affected body part than was previously found, but under the dollar-for-dollar credit system, the employer still would be exposed to pay more for the “new” injury.

In Myshka v. Electric Boat, the claimant alleged hand injuries resulting from his work as a welder with Pequot River Shipworks. He obtained his own physician’s report, which found a 14% permanent disability to his hands. In 2001 the case was settled in a lump-sum paid pursuant to 33 U.S.C. 908(i) amounting to $9,400. This joint, lump-sum settlement disposed of both the Federal and State claims (there was a claim pending under the Connecticut Workers’ Compensation act as well). He collected his award and went back to work as a welder in 2002, resuming the use of welding and grinding tools. Continue reading Calculating Credits for Pre-Existing Disability Under the Longshore Act→

New Jersey Excludes Longshoremen from Coverage.

New Jersey is one of the few exclusionary states: pursuant to New Jersey’s Workers’ Compensation Act, specifically section 36 (N.J.S.A. 34:15-36), if a petitioner has claim under the Longshore and Harbor Workers’ Act she can not make a claim for benefits under New Jersey’s Act. The state judge lacks have the discretion to decide whether or not the Federal claim is valid. Even if the state judge could, once the claimant accepts Longshore benefits, the New Jersey court loses jurisdiction as per Section 36.

Section 36 of the New Jersey Act sets forth definitions for eligibility for benefits, and specifically carves our “anyone eligible for benefits under the Longshore Act” by defining employees as

Therefore, understanding the basics of how jursidiction is established for a Lonsghore claim is essential in defending cases in New Jersey, with its long coastline, many maritime employments, and one of the largest and most active ports in the world.

How is jurisdiction established under the LHWCA?

The Longshore and Harbors Workers’ Compensation Act (“LHWCA”) covers longshore/harbor workers and other “maritime” workers. The Act has also been applied to certain other workers under the Defense Base Act.

“Status” and “situs.”

The LHWCA set forth the requirements for coverage. “Status” refers to the nature of the work performed; “situs” refers to the place of performance.

Status.

The employee claiming benefits under the LHWCA must be engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, including any harbor-worker including a ship repairman, shipbuilder, and ship-breaker. There are specific exclusion which apply to status.

Situs.

The jurisdictional trigger for a claim under the LHWCA is an injury upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel). Jurisdictional questions based on issues of situs are fact-sensitive.

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Calculating Benefits under the Longshore and Harbor Workers’ Compensation Act as extended by the Defense Base Act.

The Longshore Act compensates injured employees for “disability,” which the Act defines in terms of the employee’s lost wage-earning capacity due to injury: “‘Disability’ means incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment.” 33 U.S.C. § 902(10). The Act establishes four classes of disabilities that direct both the amount and duration of compensation payable: permanent total disability; temporary total disability; permanent partial disability; and temporary partial disability. 33 U.S.C. § 908(a)-(c), (e).

Section 8(c) of the Act delineates the methods for determining compensation when the injured worker has lost some, but not all, of his wage-earning capacity, i.e., has a permanent partial disability. Johnson v. Director, OWCP, 280 F.3d 1272, 1274 (9th Cir. 2002). Where the injury falls within a specified list of injuries, known as scheduled injuries (such as loss of a limb), Section 8(c) provides a predetermined number of weeks to be compensated at the rate of two-thirds the claimant’s AWW prior to the injury. 33 U.S.C. § 908(c)(1)-(20). For injuries involving non-scheduled permanent partial disabilities not specifically listed, compensation awards are governed by § 8(c)(21). 33 U.S.C. § 908(c)(21).

Section 8(c)(21) prescribes a straightforward formula for determining both the amount and the duration of an injured worker’s weekly permanent partial disability compensation award for non-scheduled injuries:

In all other cases in the class of [permanent partial] disability, the compensation shall be 66 2/3 per centum of the difference between the average weekly wages of the employee and the employee’s wage-earning capacity thereafter in the same employment or otherwise, payable during the continuance of partial disability.

33 U.S.C. § 908(c)(21). Thus, once the AWW and post-injury earning capacity have been determined, computing a partial disability award is a matter of simple math under the formula: wage-earning capacity is subtracted from AWW, and the claimant is entitled to two-thirds of the difference. 33 U.S.C. § 908(c)(21); 33 U.S.C. § 908(e).

AWW is determined under one of three alternative methods. 33 U.S.C. § 910. Under each, the administrative law judge first arrives at the employee’s average annual earnings, 33 U.S.C. § 910(a)-(c), and then divides by 52 weeks to determine AWW. 33 U.S.C. § 910(d)(1). Under § 910, the ALJ can base the calculation of average annual earnings on:

the employee’s earnings from the previous year, if the employee worked in the field in which he was injured for “substantially the whole of the year immediately preceding his injury”;

if (1) does not apply, the average daily wage of a similarly situated employee in the year preceding the employee’s injury; or

if (1) or (2) “cannot reasonably and fairly be applied,” a combination of factors, namely the employee’s previous earnings in the job at which he was injured, his other employment, and previous earnings of similarly situated employees.

Under Section 10(c), the injured employee’s average annual earnings must “reasonably represent [his] annual earning capacity” at the time of his injury. 33 U.S.C. § 910(c). The ALJ ascertains this sum “having regard” to

the employee’s actual wages “at the time of injury,”

the wages of similarly situated employees, “or”

the “other employment of such employee.” Id.

Post-injury wage-earning capacity is determined under § 8(h), 33 U.S.C. § 908(h). That section mandates the use of the claimant’s “actual earnings if such earnings fairly and reasonably represent his wage-earning capacity.” 33 U.S.C. § 908(h).

Under Section 10(c), the ALJ must use the information that best reflects a claimant’s earning capacity at the time of injury.

Section 10(c) permits a broad inquiry into the injured employee’s wages in order to arrive at an amount that best represents the injured employee’s annual earning capacity at the time of injury. The ALJ is to consider the employee’s actual wages at the time of the injury, and the wages of similarly situated employees or other employment of the employee. 33 U.S.C. § 910(c); Healy Tibbitts Builders, Inc. v. Director, OWCP, 444 F.3d 1095, 1103 (9th Cir. 2006). The prime objective of this broad discretion is to arrive at a sum that reasonably represents a claimant’s annual earning capacity at the time of the injury. Healy Tibbitts, 444 F.3d at 1102 (internal citations omitted). Unsurprisingly then, “[t]ypically a claimant’s wages at the time of injury will best reflect the claimant’s earning capacity at that time.” Hall v. Consol. Employment Sys., Inc., 139 F.3d 1025, 1031 (5th Cir. 1991).

The claimant’s wages when injured are especially probative when the claimant’s job differs significantly from previous employment. In that circumstance, the AWW calculation, based solely on the claimant’s higher wages in the new position, better reflects the claimant’s current potential to earn. In Healy Tibbitts Builders, the court affirmed an award of benefits calculated under section 10(c) using only the higher wages of a claimant’s job at the time of injury, despite the fact that the claimant worked for 13 weeks on a project lasting 19 weeks. 444 F.3d at 1097, 1103. In that case the ALJ credited evidence that the claimant would have been able to continue earning higher wages at his new job absent the disabling injury.

The actual overseas wages best reflect his earning capacity at the time of injury.

Blending stateside earnings with highly compensated overseas employment paints an inaccurate picture – blending simply dilutes his actual earnings at the time of injury and gives a false impression of the amount of lost earning power. See Tri-State Terminals, Inc. v. Jesse, 596 F.2d 752, 758 (7th Cir. 1979). Employees serving in the dangerous environments often encountered in Defense Base Act claims can be said to work in two different worlds that impose vastly different risks and generated vastly different incomes. If injured when working in the more dangerous, but more lucrative, job the injury compensation should be commensurate with the higher wages paid to entice him to do that job, which accurately reflects his earning capacity at the time of his injury.

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All compensation rates are based on a calculation of the claimant’s weekly wage. In every case, the actual benefit amount requires reference to the National Average Weekly Wage as a ‘maximum’ on the possible benefits. The Department of Labor determining the National Average Weekly Wage as follows:

As soon as practicable after June 30 of each year, and in any event prior to October 1 of such year, the Secretary shall determine the national average weekly wage for the three consecutive calendar quarters ending June 30. Such determination shall be the applicable national average weekly wage for the period beginning with October 1 of that year and ending with September 30 of the next year.

The U.S. Department of Labor has announced the annual rate increase effective October 1, 2012 based on a newly-calculated National Average Weekly Wage (NAWW).

The new NAWW effective October 1, 2012, is $662.52. This represents a 2.1% cost of living increase over October 1, 2011. All beneficiaries receiving permanent total disability or related death benefits as of September 30, 2012, receive a 2.1% increase in their weekly rate.

The new NAWW also establishes the new maximum and minimum rates under section 906(b); effective October 1, 2012, the maximum weekly rate under the Longshore Act is 200% of the NAWW, so the new maximum rate is $1,325.18 per week. The minimum rate is 50% of the NAWW, so the new minimum rate is $331.30 per week.

Under the Longshore and Harbor Workers’ Compensation Act (LHWCA), when an employee has a claim for damages against a third party (other than his employer) he may pursue both a civil remedy and collect benefits under the LHWCA. Section 33(a) of the LHWCA provides:

If on account of a disability or death for which compensation is payable under this Act the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive such compensation or to recover damages against such third person.

33 U.S.C. § 933(a).

It used to be the case that a claimant would have to “choose” ebtween collecting workers’ comepnsation benefits and maintaining control of their third-party case, under an “assignment” theory. That was changed, and Section 33(b) of the LHWCA provides:

Acceptance of compensation under an award in a compensation order filed by the deputy commissioner, an administrative law judge, or the Board shall operate as an assignment to the employer of all rights of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such acceptance. If the employer fails to commence an action against such third person within ninety days after the cause of action is assigned under this section, the right to bring such an action shall revert to the person entitled to compensation. For the purposes of this subsection, the term “award” with respect to a compensation order means a formal order issued by the deputy commissioner, an administrative law judge, or the Board.

33 U.S.C. § 933(b).

The LHWCA is very clear about how the proceeds of a third-party recovery are to be used:

Section 33(e) of the LHWCA provides:Any amount recovered by such employer on account of such assignment, whether or not as the result of a compromise, shall be distributed as follows:

The employer shall retain an amount equal to

the expenses incurred by him in respect to such proceedings or compromise (including a reasonable attorney’s fee as determined by the deputy commissioner or Board);

the cost of all benefits actually furnished by him to the employee under Section 7;

all amounts paid as compensation;

the present value of all amounts thereafter payable as compensation, such present value to be computed as in accordance with a schedule prepared by the Secretary, and the present value of the cost of all benefits thereafter to be furnished by section 7, to be estimated by the deputy commissioner, and the amounts so computed and estimated to be retained by the employer as a trust fund to pay such compensation and the costs of such benefits as they become due, and to pay any sum finally remaining in excess thereof to the person entitled to compensation or to the representative.

The employer shall pay any excess to the person entitled to compensation or to the representative.

33 U.S.C. § 933(e).

This is a straight-forward and dare I say “fair” way of dealing with a third-party recover in the context of simultaneous workers’ compensation benefits. The employer/insurer never is allowed to recover more than the benefits actually issued – even when the employer undertakes the entire cost of obtaining a third-party settlement. Any excess money recovered fromt he actual tortfeasor (in excess of the compensation issued by the employer/carrier) is paid directly to the claimant and/or serves as an offset against any future compensation which may be payable.

In order to calculate the Section 33(f) credit, one must break down a claimant’s recovery to its net amount. This amount is calculated by taking a claimant’s total recovery and subtracting the legal expenses incurred by the claimant. This net amount is then compared to the amount which is due as compensation. If the net amount of recovery exceeds the amount of compensation due, then the employer is not required to pay anything to the claimant. Any previous payments by the employer would be refunded from the claimant’s recovery. Bartholomew v. CNG Producing Co., 862 F.2d 555, 22 BRBS 42 (CRT) (5th Cir. 1989); see also Nacirema Operating Co. v. Oosting, 456 F.2d 956 (4th Cir.), cert. denied, 409 U.S. 980 (1972); 33 U.S.C. § 933(e).

If the claimant’s third-party recovery is less than what the employer would be required to pay, the employer only pays the difference between the third-party recovery and the compensation, see Inscoe v. Acton Corp., 19 BRBS 97 (1986), provide that the provisions of Section 33(g) are complied with. Regardless of whether the recovery is more than or less than the compensation due, the employer is entitled to set off any net recovery from a third party. Jackson v. Land & Offshore Servs., Inc., 855 F.2d 244, 21 BRBS 163 (CRT) (5th Cir. 1988).

In dealing with the Section 33(f) credit, the credit is not limited to the claimant’s economic loss. The credit is also applied to such items as pain and suffering and death benefits. The employer’s credit also includes payments for any future medical benefits for which the employer would be liable. Inscoe v. Acton Corp., 19 BRBS 97 (1986). As per 33 U.S.C. § 933(g), the claimant must obtain the employer/carrier’s permission to settle the third-party claim for less than the compensation would be entitled under the Act.

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